JUDGMENT : D.P. Mohapatra, J. - The petitioner Smt. Draupadi Senapati has filed this application tinder Article 226 of the Constitution of India seeking a writ of mandamus quashing the Order No. 575 dated 18. 2. 1981 of the District Panchayat Officer, Cuttack, communicated to her that the Collector, Cuttack, has been pleased to cancel the order of long term lease of the tank, Tala, Pokhari at Nadiasabaspur under Kusupur Grama Panchayat in her favour and for a direction to the opposite parties to act upon the lease approved by the Collector, Cuttack, under Order No. 2423/G. P. dated 19-7-1980. The State of Orissa through its Secretary, Community Development Department. The Collector, Cuttack, District Panchayat Officer, Cuttack and the Kusupur Grama Panchayat through its Sarpanch have been impleaded in the application as opposite party Nos. 1 to 4 respectively, Opposite parties 5 to 8 have been granted lease of the tank in question after the impugned order was passed. 2. The gist of the petitioner's case is that she carries on business of collecting spawn and rearing and selling fish. She sells fish fries regularly to the Fisheries Department, Government of Orissa, to different Grama Panchayats and individuals. As such, she is a 'fisherman' by profession. She was granted lease of the tank, Tala Pokhori of Nadashaspur, by the opposite party No. 4, Grama Panchayat for a period of 3 years ending with 31st March, 1981. According to the petitioner, after taking the said lease she cleared the tank of weeds and hyacinth and reared fish therein. During the subsistence of this lease she applied for grant of long term lease of the said tank for a period of 10 years from 1981-82, The Grama Panchayat on consideration of her application passed a resolution recommending her case for grant of lease for ten years. The Collector, Cuttack, accorded approval to the lease of the tank in her favour by Order No. 2423/G. P., dated 19-7-1980 (Annexure-1) and the said decision was communicated to the petitioner under Memo, No. 2425/ G. P., dated 9-7-1980 by the District Panchayat Officer, Cuttack. The petitioner thereat ter took steps for execution of the document of lease, purchased stamp papers and engrossed thereon the agreement to be executed. The petitioner thereat ter took steps for execution of the document of lease, purchased stamp papers and engrossed thereon the agreement to be executed. Since the Sarpanch of the Grama Panchayat did not execute the agreement, she sent a registered letter (Annexure-2) requesting to be intimated the date and place where the document would be executed. Copie3 of the said letter were sent to the Collector and the Block Development Officer, Cuttack, On receipt of the letter the B.D. O. wrote to the Sarpanch directing him to enter into the agreement before 5-1-1981 (Annexure-3). On 24-2-1981, the petitioner paid Rs. 100/- to opposite party No, 4, towards the first two instalments under the long term lease covering the period till the end of March, 1933 and a receipt was granted in token of such payment (Annexure-5). It is the further case of the petitioner that she subsequently learnt that by order dated 18-2-1981 the District Grama Panchayat Officer, opposite party No. 3, has communicated the order of the Collector, opposite party No. 2, cancelling the order of long term lease of Tata Pokhari of Nadiasahaspur under Kusupur Grama Panchayat in her favour. The petitioner asserts that she has not received the said order. On getting the copy of the order (Annexure-6) she has filed the writ petition for the reliefs noticed earlier. According to the petitioner there having been a completed contract between her and the Grama Panchayat regarding the grant of long term lease of the tank in question, it was not open to the collector. Cuttack to cancel the said lease. Indeed, the letter has no such power under the provisions of the Orissa Grama Panchayat Act and the Rules framed thereunder. The petitioner further contends that in any view of the matter if the Collector. Cuttack, intended to cancel the order according to approval for the long term lease in her favour he should have given her an opportunity to have her say before passing the order under Annexure-6. 3. In the counter affidavit filed by the opposite party Nos. 1 to 3, the facts stated in the foregoing paragraphs have not been controverted. Cuttack, intended to cancel the order according to approval for the long term lease in her favour he should have given her an opportunity to have her say before passing the order under Annexure-6. 3. In the counter affidavit filed by the opposite party Nos. 1 to 3, the facts stated in the foregoing paragraphs have not been controverted. These opposite parties state that when her application for grant of long term lease of the tank for a period of 10 years from 1981 was received with the recommendation of the Sarpanch of the Grama Panchayat, it was considered and the lease was granted in her favour for 10 years, i.e., from 1-4-1930 to 31-3-1990 by the Collector, Cuttack, by Order No. 2423k dated 19-7-1980. But this order was subsequently cancelled by the said authority by Order No. 875, dated 18-2-1981 when the Kusupur Grama Panchayat resolved to cancel the lease granted in favour of the petitioner, on the ground that she did not take steps for development of the tank and she did not take up pisciculture thereon until expiry of about 2-12 years of the previous lease in her favour. It is further stated in the counter affidavit that the C, E. O., F. F. D. A., also reported against the lease of the tank to the petitioner since she did not take any steps for development of the tank during the 3 years of her lease period; that the petitioner does not belong to the Grama Panchayat and there are other eligible persons, who are keen to take the tank on long term lease basis. The earlier recommendation of the case of the petitioner by the Grama Panchayat is sought to be explained by saying that at that point of time there were no other candidates in the local area of the Panchayat keen to take the tank on long term lease, These opposite parties, while accepting the fact that a sum of Rs. 100/- has been accepted by the Grama Panchayat from the petitioner towards part payment of the lease money under the long term lease, have stated that it is for the period 1980-81 and 1981-82 and not for the period 1981-82 and 1982-83 as mentioned in the said receipt. 100/- has been accepted by the Grama Panchayat from the petitioner towards part payment of the lease money under the long term lease, have stated that it is for the period 1980-81 and 1981-82 and not for the period 1981-82 and 1982-83 as mentioned in the said receipt. The opposite parties in para-4 of the counter admit that the A. D. F., Cuttack, has given a certificate that the petitioner is a fisherman by profession. The opposite patty Nos. 5 to 8 in their counter affidavit have, more or less reiterated the averments made in the counter affidavit filed by the opposite party No, 1 to 3. The stand taken by them is that they are bona fide lessees of the tank without any knowledge of the previous lease in favour of the petitioner. They have Wed the document executed by the Sarpanch in their favour, (Annexure-A/5). 4 Sri S Mi.hra-1, the learned counsel for the petitioner has urged that the decision of the Collector, Cuttack. to cancel the lease in favour of the petitioner is vitiated due to non-observance of the principles of natural Justice and fair play. He further contends that the authority has not acted within the provisions of the statute and the while taking the said decision. The learned counsel for the parties while supporting the impugned order have raised the question that the writ application is not maintainable since the relief sought by petitioner is for enforcement of a contract. 5. Coming to the provisions of the Orissa Grama ('the act' for short) and the Orissa Grama Panchayat Rules for short) relevant for the purpose, Section 76 of of the Act makes regarding disposal of property belonging to or vested in direction, management and control of the Grama Sasan. u/s (i)(b) of the said section it is provided that no immovable property shall be disposed of by sale, exchange, gift, mortgage or otherwise or by way of lease with permission for construction of permanent structures thereon without the prior sanction of the State Government; or by way of lease, not being a lease of the type mentioned above for a period exceeding three years without the prior sanction of the Collector, section of the Act lays down the procedure for entering into contract. Under the said section every contract shall be made on behalf of the Grama Sasan by the Sarpanch. Under the said section every contract shall be made on behalf of the Grama Sasan by the Sarpanch. No such contract for any periods which in accordance with any provision of the Act, the Sarpanch may not carry out without the approval or sanction of any authority specified in the Act or the Rules made thereunder shall be made by him until and unless such approval or sanction be obtained. Rule 86 deals with transfer of property vested in a Grama Sasan. It would be helpful to quote the provisions of the Rules in extenso since much depends on the interpretation of Sub-rule (3) thereof. "86(1) No immovable property vested in a Grama Sasan shall be transferred by way of sale, gift, mortgage or exchange Without the approval of the Stata Government. (2) Whenever in respect of any property vested in or under the management and control of the Grama Sasan, the State Government deem it expedient so to do, they may be general or special order made in that behalf and subject to such conditions, as may be specified therein direct that such property shall be leased out in favour of any Registered-Co-operative Societies by negotiation. The agreement for such lease shall be in Form 'F' (3) Notwithstanding anything contained in these rules, the water area vested in or under the management and control of the Grama Sasan may with the approval of the Collector be leased out by negotiation for a period not exceeding 10 years in favour of an individual who is a fisherman by caste or profession, any group of individuals or a fisherman by caste or profession, landless labourers, marginal farmers, scheduled caste and scheduled tribe persons, who are desirous to take pisci-culture on modern lines in such water area and are recommended by the Chief Executive Officer of the Fish Farmer Development Agency within whose operational jurisdiction such water area is situated. When such agency is not in operation such recommendation can be made by the District Level Fisheries Officer. The lease consideration for the first two years of the lease shall not be less than the amount equal to average of the lease amount of the water area for the last three years and from the third year shall be at the rate of Rs. 500/- per year per hectars. The lease consideration for the first two years of the lease shall not be less than the amount equal to average of the lease amount of the water area for the last three years and from the third year shall be at the rate of Rs. 500/- per year per hectars. The lease amount for a year should be paid in advance, and if the amount is not paid in advance the lease shall be automatically cancelled. The agreement of such deed shall be in Form 'F'. (4) The management of the property vested in a Grama Sasan for the time being in any manner whatever, accepting the property mentioned in Sub-rule (3) shall be made in the manner hereinafter provided." From Sub-rule (3) of Rule 86 quoted above, it is manifest hat the provisions contained therein are applicable in a case of lease of the water area vested in or under the management the control of the Grama Sasan notwithstanding other revisions in the rules. It is also clear from this provision that lease of the water area for a period not exceeding 10 years may be granted in favour of an individual who is a fisherman by caste or profession, any group of individuals or a Registered Co-operative Society consisting only of fishermen by caste or profession, landless labourers, marginal farmers, scheduled caste and scheduled tribe persons, who are desiuous to take pisciculture on modern lines in such water area with the approval of the Collector. Settlement of lease may be made by negotiation. 6. Applying the aforesaid provisions to the present case the position that emerges from the averments in the writ application and the counter affidavit that the petitioner, a fisher man by profession, who had been granted lease of the tank in question previously for 3 years, from 1978 to 1981, expressed desire to take the water area on long term lease for a further period of 10 years the Grama Panchayat recommended the case of the petitioner for such long term lease and the Collector on consideration of the matter accorded approval to the proposal for grant of lease, It is at this stage that trouble arose and the Grama Panchayat, for reasons which we shall presently state wanted to go back on its decision. On receiving a report to this effect from the Panchayat, the Collector cancelled his previous order according approval for the long term lease in favour of the petitioner. The reasons, as noticed previously are that local persons (opposite parties 5 to 8) who are fishermen by profession have now expressed their desire to take the tank on long-term lease and the petitioner had not developed the tank and carried out pisciculture in proper manner during the period of the previous lease. 7. The position is too well-settled to admit of any argument that in the matters relating to settlement of largess or entering into contract or distribution of favours the State Government and Public authorities must act in a fair and reasonable manner. What would be "fair and reasonable" would depend on the facts and circumstances of the case. The ownership of property vested in a Government or public authority cannot be equated with that vested in a private person. Indeed, the position of the former is in the nature of a trustee in respect of the property in question. It is common knowledge that in socialist state as ours the Governments and other public authorities involve themselves in multifarious development activities. Such activities are undertaken by most of the departments of the Government and the local authorities like Panchayats, Municipalities, Corporation, etc. Consequently more and more people are expected to benefit from such activities by entering into contractual obligations of different types. In fact the Government machineries are being geared up for undertaking more and more developmental activities in various fields touching day to day life of the citizens. Judged in this background the importance of Governmental agencies and other public authorities acting in a just, fair and reasonable manner becomes all the more necessary. Every effort should be made to see that actions of such authorities are free from arbitrariness which in its turn is likely to lead to favouritism, nepotism and corruption. Presumably for this purpose Section 77 and Rule 86 make the provision that settlement of water area belonging to the Grama Sasan on long term lease basis is to be made on approval by the Collector. Presumably for this purpose Section 77 and Rule 86 make the provision that settlement of water area belonging to the Grama Sasan on long term lease basis is to be made on approval by the Collector. It is intended that this would act as a check against any attempt at arbitrary and unreasonable action by the Grama Sasan The Collector, a senior and experienced administrator is expected to apply his mind to the criteria prescribed under the statute and the rules and satisfy himself that the proposed deal is free from blamish of arbitrariness and unfairness. We regret to observe here that in the present case, the Collector has failed to discharge the duty cast on him thereby defeating the Vary purpose of the provisions. The only reason as discussed earlier, which prompted the Collector to cancel his previous order according approval to the long term lease was that the Grama Pancbayat subsequently resolved not to grant the lease in favour of the petitioner. No material has been placed before us to show that the Collector made any attempt to enquire into reasons for the Grama Pancbayat going back on its earlier decision and particularly about the allegations mentioned in the resolution of the Grama Panchayat that the petitioner did not carry out pisciculture in proper manner when she was granted the lease during the period of the previous lease. The position is admitted that the petitioner was neither informed by the Grama Panchayat nor the Collector about the aforesaid allegations and of the proposal not to execute the lease in her favour. We ate constrained to reiterate that the Collector while acting u/s 77 read with Rule 86 is not expected to act merely as an authority giving assent to anything that the Grama Sasan suggests. He is expected to exercise the power vested in him on due application of mind to the facts and circumstances of the case and the relevant provisions of the statutory rules. It is not necessary to enter into a detailed discussion about the validity of the reasons given in the impugned order since we propose to remit the matter to the Collector for fresh disposal. Suffice it to say that the two grounds stated in the counter affidavit, that local persons subsequently came forward to take the tank on lease is not a relevant consideration. Suffice it to say that the two grounds stated in the counter affidavit, that local persons subsequently came forward to take the tank on lease is not a relevant consideration. The statute makes no provisions entitling local persons to any preferential treatment over others. All that it provides is that an individual who is a fisherman by caste or by profession, any group of individuals or a registered Co-operative Society consisting only of fishermen by caste or profession, landless labourers, marginal tanners, scheduled caste and scheduled tribe persons are entitled to take the water area on long term lease in the manner prescribed. Regarding the ground that the Panchayat realised though belatedly that the petitioner did not develop the tank properly during the period of previous lease minimum of fairness required the Collector to enquire into the allegation giving an opportunity to the petitioner to have her say regarding the matter. This is especially so when the Collector on due consideration of the relevant matters, had decided to accord approval to the proposed long term lease in her favour. On being intimated of the said order the petitioner had taken steps in making part payment of the instalment money to the Grama Panchayat, in purchasing the stamp paper and engrossing the agreement thereon for its execution by the Sarpanch. The learned counsel for the opposite parties strenuously contended that the reliefs sought in the writ petition relate to enforcement of contractual obligations, for which this Court in its writ jurisdiction is not the appropriate forum. This argument, in our opinion, in the facts and circumstances of the case, is devoid of force. It is clear from the facts stated in the foregoing paragraphs that in this case the petitioner does not seek enforcement of the terms of any agreement. The substance of her complaint is that she was unfairly and unjustly kept out of the benefit of entering into an agreement with Grarma Sasan though the matter had been finalised in accordance with the provisions of the statute and the rules, The learned counsel for the opposite parties also contended that the statute makes no provision for noticing the petitioner before recalling the order of approval by the Collector. This argument is equally devoid of force, Every statutory provision is to be judged with the touch stone of fairness which is. the basic essential for excluding arbitrariness. This argument is equally devoid of force, Every statutory provision is to be judged with the touch stone of fairness which is. the basic essential for excluding arbitrariness. It is a fundamental principle of interpretation of statute that every attempt should be made to uphold the statute and not to strike it down on recognised grounds of challenge of which unreasonableness is one. The approach in such a case should be seen if under the provisions of the article or the rule; the principles of audi alteram partem (hearing the other side) is excluded. We find no provision in the statute or the rules which provides that no notice need be given to the party against whom allegations are pending to have a say regarding such allegations. While making this observation we are proceeding on the assumption that the Collector acting under Rule 86(3) has the power to recall the order according approval for a long tern lease. We keep that question open since such a question has not been argued before us. 8. Before concluding we shall refer to some decisions cited before us. The learned counsel for the opposite parties placed reliance on several decisions of the Supreme Court and of this Court in support of their contention that the reliefs sought in the writ application relate to enforcement of contractual obligation and as such cannot be enforced in exercise of iurisdiction under Article 226 of the Constitution of India and that the principles of natural justice are not attracted in a case for enforcement of contract. As noticed earlier, the petitioner in this case does not seek enforcement of any contractual obligation as such. But in a nutshell, her complaint is that the matter relating to grant of long term lease of the tank in her favour has been dealt with unfairly, arbitrarily and in violation of the provisions of Section 77 of the Act, and Rule 86 of the rules. In the case of Ganga Saran and Sons P. Ltd. Vs. But in a nutshell, her complaint is that the matter relating to grant of long term lease of the tank in her favour has been dealt with unfairly, arbitrarily and in violation of the provisions of Section 77 of the Act, and Rule 86 of the rules. In the case of Ganga Saran and Sons P. Ltd. Vs. Income Tax Officer and Others, the Court held that where a company tried to enforce through writ petition the right to remove timber without the liability to pay royalty, it was held that the company was not enforcing its right under Rule 87 of the Assam Land and Revenue and Local Rates Regulation, but was seeking to enforce a contractual right under the specific term of contract of lease agreed to between the company and the Government. Such contractual right, therefore, could not be enforced in writ petition. The Court further observed that in substance, it was a suit for refund of royalty, alleged to be unauthorisedly recovered and that could not be entertained in exercise of the writ jurisdiction. The decision is distinguishable since the dispute in the case was whether the company was entitled under the contract of lease to cut and fell the trees without payment of royalty for the trees out and fell. The dispute in the present case is not of a comparable nature. In the case of Radhakrishna Agarwal and Others Vs. State of Bihar and Others, M. H. Beg, C J. speaking for the Court, observed that at the very threshold or at the time of entry into the field of consideration of persons with whom the Government could contract at all, the State, no doubt acts purely in its executive capacity and is bound by the obligations which dealings of the State which the individual citizens import into every transaction entered into in exercise of its constitutional powers. But, after the State or its agents have entered into the field or ordinary contract the relations are no longer governed by the constitutional provisions but by the legally valid contract which determine rights and obligations of the parties inter se. No question arises of violation of Article 14 or of any other constitutional provision when the State or its agents, purporting to act within this field, perform any act. No question arises of violation of Article 14 or of any other constitutional provision when the State or its agents, purporting to act within this field, perform any act. In this sphere they can only claim rights conferred upon them by contract and are bound by the terms of the contract only unless some statute steps in and confers some special statutory power or obligation on the State in the contractual field which is apart from contract. In that case the State Government leased out some forest land to the appellants to collect and exploit Sal seeds for 15 years on payment of royalty at a certain rate and when the State, under the terms of the leases, revised the rate or royalty and thereafter cancelled the leases for breach of certain conditions, the petitioner-appellants challenged the of orders of revision of rate and conciliation of leases as illegal by writ proceedings under Article 226. The Court held that the contracts did not contain any statutory terms or obligations and no statutory powers or obligation which could attract the applications of Article 14 was involved. From the above statement of facts, it is manifest that the case is distinguishable from the present one. However, the observations made by the Court render support to the view taken by us. In the case of Raghunath Behera Vs. Revenue Divisional Commissioner (Southern Division) and Others, a Division Bench of this Court took the view that a writ of mandamus cannot be granted to enforce an obligation flowing from a contract. The facts of that case were that the name of the petitioner was recommended by the Tahasildar for settlement of fishery rights under the provisions contained in a set of administrative jurisdiction in the manual of Tahasil accounts but the Revenue Divisional Commissioner conferred the said right on another person for valuable consideration, petition tor settlement of the fishery rights with petitioner was not maintainable. The Court observed that the petitioner acquired no statutory or contractual right by the proposed action of the Tahasildar, when the same was neither accepted nor ratified by the appropriate authority, the Revenue Divisional Commissioner. The Court observed that the petitioner acquired no statutory or contractual right by the proposed action of the Tahasildar, when the same was neither accepted nor ratified by the appropriate authority, the Revenue Divisional Commissioner. While taking this view the Court referring to several decisions of the Supreme Court observed that no person has a vested right to get any lease although he does have right to get his application for lease disposed of fairly and no - only. The facts of the decided case are clearly distinguishable from those of the present case. The observations referred to above throw sufficient light on the matter in dispute in the present case and our opinion, support the view taken by us. In the oft quoted decisions of the Supreme Court in the case o ( Ramana Dayaram Shetty Vs. International Airport Authority of India and Others, p. .V. Bhagawati, J. (as he then was) speaking for the Court pointed dealt with the problems arising out o settlement of largess by Government in the form of contracts. Discussing the role of welfare state he observed : "To-day the Government, in a welfare state is the regulator and dispenser of special services and provider of a large number of benefits, including jobs contracts, licencess, quotes, mineral rights, etc. XX XX XX All these mean growth in the Government largess and with the increasing magnitude and range of Governmental functions as we move closer to a welfare State, more and more of our wealth consists of these new forms. Some of these forms of wealth may be in the nature of legal tights but the large majority of them are in the nature of privileges. XX XX XX A democratic Government cannot lay down arbitrary and capricious standards for the choice of persons with whom alone it will deal. XX XX XX It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotes or licences or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norm which is not arbitrary, irrational or irrelevant. The power of discretion of the Government in the matter of grant of largess including award of jobs, contracts, quotes, licences, etc. must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.' A view in a somewhat similar strain has been taken by a recent decision of the Supreme Court in the case of Ram and Shyam Company Vs. State of Haryana and Others. In the said case in an auction for grant of lease the highest bid of 'A' was accepted by the Presiding Officer but the Government refused to confirm the sale. Afterwards the lease was granted to 'B' who had offered some mote money, on the order of the Chief Minister. The Court held that a unilateral offer, secretly made, not corelated to any reserved price made by 'B' after making false statement in the letter was accepted without giving any opportunity to 'A' either to raise the bid or to point out the falsity of the allegations made by 'B' in the leter as also the inadequacy of his bid. 'A' suffered an unfair treatment by the State in discharging its administrative functions thereby violating the fundamental principle of fair play in auction. When he gave the highest bid, he could net have been expected to raise his own bid in the absence of a competitor. Acceptance of an offer secretly made and sought to be substantiated on the allegations without the verification of their truth, which was not undertaken, would certainly amount to arbitrary action in the matter of distribution of State largess which is impermissible. Applying the principles enunciated observations made in the foregoing decisions to the present case it is dear that the treatment meted out to the petitioner was unfair and arbitrary. Neither the Grama Sasan, nor the Collector gave any opportunity to the petitioner to meet the so called allegations against her which prompted the authority to go back on the decision to grant the long term lease of the tank to her. Neither the Grama Sasan, nor the Collector gave any opportunity to the petitioner to meet the so called allegations against her which prompted the authority to go back on the decision to grant the long term lease of the tank to her. Over and above this, as we have pointed out earlier, the provisions of the statute and the rules were not adhered to by the Collector. 9. For the reasons discussed above, we hold that the impugned order of the Grama Panchayat Extension Officer, under Annexure-6, communicating the decision of the Collector to cancel the approval of long terra lease in favour of the petitioner is unsustainable. Since the Kusupur Grama Panchayat (opposite party No 4) has not appeared in the case in spite of service of notice and the relevant materials preceding the impugned order are not before us, we deem it appropriate to direct the Collector to reconsider the matter arising from the subsequent resolution said to have been passed by the Grama Panchayat not to grant the long term lease- to the petitioner, after giving an opportunity of hearing to the petitioner and the opposite parties 5 to 8. If the Collector finds cogent and compelling reasons for reversing his earlier order according approval to the grant of the long term lease to the petitioner he will pass a reasoned order and communicate the same to the parties. The matter shall be disposed of by him within a period of two months from to-day. Till disposal of the matter none of the parties will catch fish from the tank. There will be no order as to costs. R.C. Patnaik, J. 10. I agree. Final Result : Dismissed